U.S. Secretary of the Interior Ken Salazar says reports that the U.S. government has approved BP's (NYSE: BP) requests to resume drilling at its existing wells in the Gulf of Mexico are inaccurate.
Over the weekend, the United Kingdom's Financial Times reported that BP was close to an agreement with the U.S. government which would allow the energy company to resume drilling at ten of its existing wells in the Gulf. On Monday, Secretary Salazar quashed these media reports when he stated, "There is absolutely no such agreement nor would there be such an agreement." The Secretary stressed that BP will have to undergo the same process as other companies, and prove they can meet strict safety standards.
The British-based oil and gas company owns the largest amount of drilling real estate in the Gulf of Mexico, and is eager to tap its asset as it continues to recover from the financial ravages caused by the blowout of its Macondo oil well in the Gulf last April. The explosion of the well killed 11 oil rig operators and leaked 4.9 million barrels of oil into the ocean, making it the worst oil spill in American history.
Nevertheless, just eleven months after the catastrophe, BP is pressing to return to drilling in the Gulf. New CEO Bob Dudley has made safety a top priority as highlighted by the creation of a division to monitor safety in the company's drilling operations. Since the division was established BP has shut down projects in Alaska and the North Sea after they failed to meet standards.
A BP official, speaking in anonymity, told the New York Times that significant progress had been made in the company's dialogue with federal regulators but no deal was in place. President Obama has made it known that domestic oil and gas production is critical to the country's short-term energy independence goals. Recently, the government began to open up the Gulf to drilling again. Shell, Exxon, and Chevron have all received approval to resume operations in the Gulf as long as they agree to meet new, stricter safety standards.
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